Workplace Investigations by Outside Counsel – Make Sure They’re Done Right


MP900302920In a June 18, 2013, post on Win-Win HR, entitled Workplace Investigations: $300,000 in Sanctions Highlights Risks of Using Employer’s Regular Counsel, Lorene Schaefer highlighted a case in which an outside law firm’s investigation into a claim of discrimination led to an award of $300,000 in sanctions, plus other penalties against the employer and its law firm. See EEOC et al. v. Spitzer et al

After the Supreme Court’s recent decision in Vance v. Ball State (see the Vance opinion here and my earlier post here), workplace investigations into discrimination, harassment, and other employee claims, will be even more important. After Vance, courts will analyze fewer cases under a strict liability theory. More cases will depend on prompt and complete investigations to avoid findings that the employer was negligent and therefore liable for the bad conduct of the plaintiff’s managers and co-workers.

In the Spitzer case, the outside attorney failed to produce his notes of the investigation during discovery. When the judge learned of this omission, he came down hard on both the defendant employer and on its outside law firm.

I have hired outside counsel to conduct investigations, both when I was in-house counsel and when I was an HR executive. In my consulting life, I have also been the investigator in workplace complaints acting under the auspices of another attorney.

When I hired an outside attorney to investigate, we always discussed whether the case was likely to result in litigation, and whether our usual outside law firm should do the investigation or whether we should hire another attorney for the sole purpose of investigating and potentially testifying at a later trial. If litigation was likely, or if we wanted to reserve our usual firm for trial, we found another attorney to use as the investigator. Only when litigation was less likely, or when we thought prior knowledge of the company was critical to the investigation, did we use our regular trial counsel, knowing that if the case did go to litigation, we would have to bring another firm up to speed to represent us in court.

MP900302921The Win-Win HR article contains an excellent analysis of the Spitzer case and of the legal and tactical issues in workplace investigations. Here is my brief advice for employers:

1.   Make sure your attorney investigator is well qualified to conduct the investigation.

a.   The investigator needs to know the law and get up to speed on your business (to the extent relevant)

b.   The investigator needs to be comfortable interviewing employees at all levels of the organization – complaining party, alleged harassers or discriminators, witnesses, and possibly upper management.

2.   Remember that one primary reason for conducting these investigations is to prepare for later litigation. Keep your litigation strategy in mind from the beginning.

a.   Make sure that any documents created during the investigation are accurate and unlikely to harm your case. (In Spitzer, the attorney notes that were not produced included a note next to one witness’ remarks saying “BAD for US”.)

b.   Also, the investigator should have the personality to make a good witness.

3.   Discuss with your attorney whether he or she should be an investigator or trial counsel in the case. Don’t believe the attorney if he or she wants to be both.

What issues have you seen in using attorneys to investigate workplace wrongdoing?

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